Figure Technologies, Inc. (FigureTM), a FinTech company creating innovative products and tools that empower homeowners to improve their finances, announced today Figure Home AdvantageTM, a smart sell-and-leaseback alternative to reverse mortgages for retirees and a new way for Baby Boomers to lock in record housing prices as they plan their retirement.
With Figure Home Advantage, homeowners convert their home equity into cash they can put to use now while continuing to enjoy life at home without the ongoing burden of property taxes, repairs, and maintenance.
Roughly 10,000 Baby Boomers turn 65 years old in the U.S. every day. A study by the National Conference of State Legislators and AARP found that 90 percent of people over age 65 want to stay in their home for as long as absolutely possible. Yet, most older Americans don’t have enough savings to cover retirement expenses or realize the lifestyle they’d imagined. According to a survey by the Insured Research Institute (IRI), only 25 percent of Baby Boomers believe they will have enough money in retirement.
"We’re building solutions to help Americans cope with this looming retirement issue. With rising interest rates, cash-out refinancing is an increasingly painful way to meet cash flow needs. Yet for homeowners nearing or already in retirement, home equity may be the most important source of money they have to support retirement," said Wendy Harrington, Figure CMO. "By unlocking hard-earned equity with Figure Home Advantage, homeowners can aid their retirement with additional funds and less stress."
Here's how Figure Home Advantage works. Figure buys the home and grants the seller(s) a lease that renews annually, putting the homeowners in charge of how long they stay. Homeowners get their proceeds in one lump sum to bolster their nest egg, cover their expenses or fund what matters most to them. Figure takes care of the property management from there, covering property taxes, homeowner’s insurance, and ongoing maintenance.
Key Benefits of the Figure Home Advantage
Reverse mortgages have been criticized for being confusing, restrictive, and shortchanging homeowners on their equity; however, they were created to address the large, growing retirement income gap. Figure Home Advantage is an intelligent alternative that solves many of the concerns retirees and financial advisors have with traditional reverse mortgages.
Advantages of Figure Home Advantage:
● Access more cash — In a typical sale-leaseback agreement, 80 to 90 percent of the home’s value commonly goes directly to the homeowner, compared to traditional reverse mortgages, which offer 35 to 60 percent, and cash-out refinances, which are costly now that rates have risen.
● Lock in housing gains — With housing prices and home equity at all-time highs in many cities across America, it’s a good time to lock in gains. This close to retirement, few want to be at the whim of housing prices and their cyclical nature.
● Increase stability — Figure Home Advantage participants know how much money they'll receive upfront and how much they'll pay each month in rent, making it easier to budget and plan for the future.
● Manage the unexpected — Unexpected repairs, rising property taxes, and costly maintenance no longer need to throw retirement plans off track. With Figure Home Advantage, Figure takes on those responsibilities and costs.
● Eliminate age requirements — While traditional reverse mortgages require the youngest borrower to be at least 62 years old, there is no age restriction with Figure Home Advantage.
● Enjoy more flexibility and opportunity — While some hope to stay in their current homes for many years, others are actively searching for their next destination. Having the choice is a core principle of Figure Home Advantage.
The problem needs creative solutions. “American homeowners, on average, do not have sufficient resources outside their home to support themselves through retirement. Most will need to access their home equity to supplement other income sources,” notes Jim Keene, CFA, co-author of “Retire on the House: Using Real Estate to Secure Your Retirement.” “Reverse mortgages offer a limited, expensive, inflexible option and only access a modest portion of home equity. Figure Home Advantage™ helps homeowners access more of their home equity, maintain residence, simplify and improve the quality of their lives and diversify their retirement income sources.”
Technology Empowering Consumers
Figure uses advanced technologies to create innovative products for improving the lives of consumers. The Figure Home Equity LoanPLUS and Figure Home Advantage are the first two examples of how the company is rethinking financial products with the consumer in mind. Figure harnesses the power of blockchain to reduce costs and increase access to financial products, and it has built an ecosystem of leading financial firms — asset originators, buyers, and financiers — around its blockchain solution, ProvenanceTM.
Figure Home Advantage Availability
Starting today, Figure Home Advantage is available in 12 markets: Atlanta, GA; Cincinnati, OH; Cleveland, OH; Dallas, TX; Houston, TX; Jacksonville, FL; Philadelphia, PA; Phoenix, AZ; Pittsburgh, PA; Reno, NV; San Antonio, TX; and Tampa, FL, with a goal of reaching 40 markets across the U.S. by the end of 2019.